TONY EASTLEY: As the Murray-Darling Basin Authority prepares to release draft recommendations on how much more water needs to be removed from farming practices, an environment group has analysed the effects of the Commonwealth water buyback so far.

Environment Victoria says its analysis shows that farmers are lining up to sell their water rights and, rather than leaving the industry, most of them are staying on.

But, as Simon Lauder reports, there are also many irrigators who are desperate to sell up and to get out.

SIMON LAUDER: When the Murray-Darling Basin Authority suggested taking 3,000 to 4,000 gigalitres of water out of irrigation, it got an angry response. Now the authority is preparing to release its draft Basin plan. The head of Environment Victoria, Kelly O'Shanassy, says she's worried it will set its sights lower this time around.

KELLY O'SHANNESSY: Certainly worried that the authority is talking about a lower figure to return to the environment than they were previously were.

SIMON LAUDER: Environment Victoria has analysed the tenders involved in the Commonwealth's purchase of more than 1000 gigalitres since 2007.

Kelly O'Shanassy says farmers are lining up to sell their water rights to the Commonwealth and more than two-thirds of sellers have sold only a part of their entitlement.

KELLY O'SHANNESSY: Water buyback is really important to provide options for communities and it is most important in the areas where irrigation simply is no longer viable because of drought.

SIMON LAUDER: To be realistic about it though, a big buyback would mean more farmers leaving and more farmers leaving quicker which would have a big impact on communities, wouldn't it?

KELLY O'SHANNESSY: Well certainly it is the best thing for everyone that water buyback is targeted into areas where the irrigation is really not a way of living, not a good way of producing food. It is simply not really working, the families are struggling anyway, there is not a lot of food, (inaudible) are being produced. They are going to sink anyway those communities and those farmers and we can either stand back and let them or we can help them through a water buyback scheme.

SIMON LAUDER: Bill McClumpha is an irrigator in Victoria's Sunraysia district. He says many irrigators there are looking for a way out of the horticulture industry and they want to be able to sell their water rights, so the bigger the buyback the better.

BILL MCCLUMPHA: Personally, I'd like to see it up the higher end. It is pretty obvious that irrigators, horticulture is in deep trouble and it really needs to be rebalanced. This would be a great chance to do it but the pressure groups have got their way I think and I think the plan is going to be pretty much curtailed.

SIMON LAUDER: And when you say pressure groups, who are you referring to?

BILL MCCLUMPHA: Oh, well all the community groups, the irrigator groups, the farming groups, the NFF(National Farmers' Federation), the VFF, anybody who is interested in retaining water in horticulture without actually having to pay the price of holding onto entitlements. Individual irrigators with permanent entitlements are far better off than a large buyback that rebalances their chances of staying in horticulture and you know, it helps maintain the value of their entitlement.

SIMON LAUDER: The president of the National Farmers' Federation, Jock Laurie, says the details of the plan will be more important that the scope of the water buyback.

JOCK LAURIE: There have been lots of figures bandied around by many different people and in the end, the figures don't matter. If the plan certainly can't be achievable simply because of, it is too heavy handed on one side or the other then obviously the outcome will be disastrous for everybody.

So it is a matter of making sure they get that balance right and that balance will be basically judged by the community as a whole.

TONY EASTLEY: The president of the National Farmers' Federation Jock Laurie. Simon Lauder, the reporter.